Cars.com Q1 2025: Navigating Contradictions in Dealer Spending, AccuTrade Growth, and OEM Revenue Insights

Dealer and OEM ad spending patterns, AccuTrade and DealerClub growth expectations, OEM and dealer ad spending strategy, Accu-Trade growth and dealer engagement, OEM advertising revenue and growth are the key contradictions discussed in Cars.com's latest 2025Q1 earnings call.



Revenue and Financial Performance:
- Cars.com reported revenue of $179 million for Q1 2025, within the guided range. Adjusted EBITDA exceeded the high end of expectations by more than a point.
- The strong financial performance was driven by growth in solutions like AccuTrade and DealerClub, and effective cost management.

Marketplace and Consumer Traffic:
- The company saw significant improvements in its marketplace business, with a record 29 million average monthly unique visitors in Q1, reflecting a 1% year-over-year increase in traffic after adjusting for an extra leap day in 2024.
- This growth was fueled by strong content engagement, particularly around tariff-related resources, and a better user experience.

Product and Solution Adoption:
- AccuTrade appraisal volume increased by 16% quarter over quarter, reaching over 1 million quarterly appraisals, with a 14% increase on an appraisal per dealer basis.
- DealerClub's active users grew by 60% and nearly doubled its volume of completed transactions from February to March, demonstrating the appeal of these solutions in acquiring used vehicle inventory amid new car supply constraints.

Cost Management and Operating Leverage:
- Operating expenses were up 3% year over year, primarily due to higher severance costs and new DealerClub expenses, while adjusted operating expenses were roughly flat.
- The company maintained cost discipline, affording them the ability to reaffirm their adjusted EBITDA guidance amidst uncertainty in the new car market.